About the project «Success Builder»
How do you find your place in life? How do you find something to do that both comes naturally to you and makes you happy? The answer is that you have to apply the knowledge you’ve gained from university and from life itself correctly. The Success Builder Project features graduates from the Higher School of Economics who have discovered themselves through an interesting business or an unexpected profession. The protagonists share their experiences, and talk about the big shots they’ve schmoozed and how they’ve made the most of the opportunities they were given.
The profession of a trader has an aura of mystery around it. These are people with a wonderful salary who have the privilege of being part of a small community of professionals. In the latest edition of Success Builder, Denis Gribov, a trader for Bank of America Merrill Lynch, talks about how to use your own savings to break into trading, as well as how to keep your emotions at bay, trade during lunchtime, and compete with artificial intelligence.
How did you discover your penchant for trading, and how did a master’s degree affect this?
When I was in my sophomore year at the Financial University, I saw an ad for a forex brokerage and decided to open up a trading account. At first I traded using virtual money to understand how it worked. Then I took my savings and started trading with real money. Even though I initially lost a lot and learned from my mistakes, I wanted to get better at trading. I started reading books on exchanges and price analysis for financial instruments. As a result, I realised I wanted to work in trading professionally. That’s probably how anyone becomes a trader. If your failures motivate you instead of knocking you off course, then it’s your calling. When I needed to master financial tools and processes at an even more professional level, I enrolled in the master’s programme at HSE.
Why did you choose a Russian Master’s programme?
Why does one need a master’s from abroad? It would be hard to stay there and work; I know a lot of strong individuals who returned to Russia afterwards. I wanted to work in Moscow. At a western bank, this kind of work involves business trips, so you’re still going to be flying to London or New York while living in Moscow. I don’t want to move to another country. A degree from HSE is more than enough to find a job at any company in Russia.
Another factor is concrete knowledge. You can go enrol in a master’s with certain disciplines or a certain instructor, but in the end it’s important how much you want to study and how prepared you are. Additionally, you can prove you’re qualified to work in finance at the international level through a CFA certificate. This is a recognised financial exam that helps you get any job in the financial sphere. HSE provides you with enough knowledge to pass the first level exam.
When you decided to go to HSE, what helped you select a specific programme?
I got my bachelor’s in 2014, actually right when the economic crisis happened and there weren’t any trading vacancies at western banks. This didn’t scare me off. Of the universities and programmes I had looked at, HSE met my requirements – I wanted to work during the day and study in the evening. Additionally, the programme gave me the opportunity to prepare for the CFA exam. During my master’s, I found a job through the dean’s office for the faculty and started working as a stock analyst for BCS Financial Group.
Was this your first job in finance? Is it worth working somewhere first, even if it’s not in your field of study?
I don’t understand how someone can study a certain field that they consciously selected, but then not work in this field. I did several short internships, but I still consider BCS to be the start of my career. What helped me was my experience with trading independently and my understanding of financial markets at the master’s level. This made me more competitive and allowed me to enter the ‘deep space’ of job vacancies at western banks.
What actually plays a role in finding a job – experience in finance or a degree?
I think a successful interview is a combination of many factors, one of which is luck. Of course, you need input data – that is, a diploma or a portfolio of some sort – in order to make it through the initial selection process, but there are always more strong candidates than there are positions. One factor to achieving your goal is perseverance, like with success in life as a whole. Failure is a springboard to the job of your dreams, and you have to persistently work towards reaching these dreams.
Yes, broken self-esteem can hurt, but you have to overcome this. I interviewed at nearly all the largest banks, some of them twice, and I got a lot of rejections
Can you talk about the technologies that are currently replacing real traders with artificial intelligence?
Trading algorithms allow you to use liquidity in a way that doesn’t affect prices and ensures the best use of client orders. An algorithm works ten, twenty times faster than a real trader and is able to analyse information every second. Why haven’t all traders been replaced by algorithms yet? Because you need an operator to run a programme, like you need a pilot to fly a plane. The trader selects which algorithm should be used at a given time and is responsible for the result.
Of course, the number of traders has diminished over the last 10-15 years, but I think the industry has reached an optimal balance between people and automated systems. Each desk generally has just two traders so they can stand in for one another.
What are the responsibilities of a trader? What is the essence of the job?
A trader’s job at an investment bank is to service clients and large funds that want to buy or sell large amounts of shares. We help them do this in the best way possible by acting as an intermediary. We oftentimes just bring clients together with one another without impacting the market. We also serve as a market maker to provide clients with as much liquidity as possible; that is, we buy or sell a client’s shares directly, even if there are no offers on the market at the current price. This is the standard list of responsibilities for a trader. I only work with stocks, but there are traders of bonds, commodities, currencies, and derivatives as well.
What qualities does a bank value in a new trader?
There are two important qualities: attention to detail and the ability to handle stress. Details are extremely important because you carry out 100-200 deals each day, some simultaneously, and you have to be able to do everything at a high level of quality. A trader also has to keep a cool head at all times. It’s easy to make a mistake because of your emotions, and this could cost the bank a lot of money. They’ll forgive you the first time, but the second they’ll fire you, and this could ruin your reputation. I started learning to handle my emotions when I traded with my own money through a broker.
If you had this sort of ‘samurai’ experience, why did you need a master’s degree?
You have to have certain foundational knowledge: macroeconomics, financial markets, statistics, and financial mathematics. In order to assess market dynamics, you have to understand the impact of macro news on stock prices. For example, say the Central Bank meets and decides to raise rates unexpectedly – you have to quickly weigh what this will impact and how in the short- and long-term, and you have to answer the question, ‘what should we do,’ in a matter of seconds. If you have trouble with nerves, I wouldn’t suggest becoming a trader. I also think psychological tests are necessary when getting a job.
What mistakes do beginning traders make?
The main one is inattentiveness. When you are working a lot of orders simultaneously, it’s easy to miss something, mix things up, or forget to do something. There are technical errors also. For example, there are stocks on the Russian market that cost several kopecks, and when an order comes in for several million dollars, the number of shares is in the billions. You have to carefully count the number of zeros you’re putting in; a mistake can end up costing a lot in the end. You can make a mistake of one or two kopecks, but when you have 100 million shares, the mistake will be a substantial sum.
So getting fired for slipping up is a mark of shame?
If you were fired for a slip up, then it’s obviously not your first or even second. The community of traders in Moscow isn’t large, and it’s fairly easy to form an impression of a former employee through members of this community.
What’s it like to work at Merrill Lynch? Is it a typical western company?
Over the course of their many years in operation, western banks have developed their own corporate culture. There are high ethical standards when it comes to working with clients and colleagues. I can’t even imagine someone allowing themselves to offend a co-worker, even in a stressful situation. As for rapport among the team, we all use the informal ‘ty’ when speaking, even though a lot of employees are over 40. You become immersed in this atmosphere, and it fine-tunes you by itself.
How quick is career growth at a bank and what are the stages?
Everyone is interested in your development as an employee, but it all depends on how you show yourself. At the beginning of the year, you meet with your manager to discuss what to improve upon, what to advance towards, and what goals to set for the year. Then in the middle of the year, you do a pulse check, and at the end of the year you get a final review and see your actual development track. Like many people, I sit next to my boss. He sees what I do, and he always has a fresh impression of my work.
What does a trader do on business trips?
Mostly meet with clients because the overwhelming majority of funds are in Europe or the U.S. You also sometimes have to stand in for colleagues in London; there aren’t that many traders, and if someone goes away on vacation, their desk can’t just sit empty.
Does the dynamic of trades require that the trader constantly be on call for clients?
Of course. I’m always in a chat and on a multi-line phone. I have to be available while the market is open. Fortunately, it closes every evening and doesn’t work on the weekend. I mostly work with the stocks of Russian companies, which trade in Moscow and London. That’s why our work schedule is Greenwich time. But the intensity during this period is much higher than for consultants. You have days when you literally cannot leave your desk.
By the way, we don’t get lunch breaks. We eat right at our desks while we’re talking on the phone and conducting trades. The work isn’t always nice and convenient, but it’s definitely fun and keeps you on your toes
What professional prospects are there in our market?
A trader is someone whose job depends on the current economic situation. My company offers every opportunity for growth and a long career. The dynamics of the market make adjustments, though. In 2008-2009, during the big crisis, a lot of traders lost their jobs. It’s hard to predict what you have waiting for you in your profession five years down the road.
The people currently in high-up management positions at banks started in the 2000s when there was an economic boom and it wasn’t hard to find a job. The market is contracting now, the economy isn’t growing, and business activity isn’t high, which is why it has become harder to find a good, prospective job. Nonetheless, this shouldn’t frighten you, but serve as additional motivation to develop your knowledge and gain experience to become more competitive. In entry-level positions, you shouldn’t focus on money at all. You should think about the experience you can gain and what you can learn from your colleagues.